Is this the next ecommerce revolution ?

By Pierre Vassal, Managing Partner at ABONEO

On October I attended the #Conext  event in Lille. I am always intrigued to learn about new approaches to both Internet and bricks-and-mortar sales, new techniques to mine information with data analytics, innovations in customer acquisition and retention methods, and so on.

This year, I sensed a convergence of technologies that have altered E-Commerce. We would not consider doing business on the Internet now in the way that we used to just a few months ago.

One step checkout

Amazon Pay acts as a trusted third party, not only for payments like Paypal but also as a provider of delivery addresses. Customers can buy products with only one step to the shopping basket. Logging in to Amazon inside eStore leads to a unique page where delivery, billing and payment details are al pre-populated. No more complex and boring shopping funnel.

The customer can finalize the entire transaction with just one click.

This is an amazing feature as, according to the Baymard Institute report , at least 60% of the current EStore shopping funnel must be improved.

Why more trust in marketplace  ?

In addition to one step checkout, buying in an eStore granted by a marketplace has dramatic avantages :

For the customer

  • Payment as it is managed by the marketplace.
  • Merchant must fulfill criteria regarding shipping, customer relationship, proposed services and ethics.

For example, Amazon A to Z guarantee oblige eStore to answer to a request in 2 days, to return goods in 14 days. Amazon act as a “justice of the peace” between customers and the Merchant.

For the Merchant

  • Customers are qualified and checked by the marketplace.
  • Marketplace reference the eStore and add more visibility.
  • Marketplace one step checkout reduce payment complexity implementation.

The raise of marketplaces 

E-Commerce business model as we know is changing, marketplaces will be at the center of the customer relationship while eStore will have to affiliate to these platforms. The question is no more to choose the right marketplace to distribute its products but how to add value to attract clients.
Customers look forward to trustfully relationship with merchants and to buy quickly, it is mainly the offer of marketplaces at the expense of eStore.

However, customers need also exhaustive and refined product information which a marketplace could not provide. Amazon Pay is a beginning of new spending habits, customers go back to eStore where valuable content is and will continue shopping inside the same website.

It is a risk for brands to have their digital customers swallowed by new web pure players dedicated to a type of product which use Amazon Pay for delivery, payment and trustful relationship.

As David L. Roger explains in his book “The Digital Transformation Playbook” , customers spending habits are changing. It is now a matter of decision of brands even competitors in real life to partner and unify forces to counteract generalists marketplaces and new web pure players.

What strategy for marketplaces ?

Main interest to create a new marketplace is to mutualize resources, less costs for Payment Services Providers, Data Quality Provider which controls customers registration and also for brands a mutualization of logistics.
We can imagine for companies which distribute flowers, chocolate and wine to make an agreement on logistics as product delivery is done on controlled temperature.

Content strategy

Where the goal of a marketplace is to find and buy quickly products, eStore have to create a brand universe and have deep products information to captivate consumers.
eStore could publish some essentials products attributes to the marketplace and keep the full description for their own website.

Technology is mature

As of now Product Information Management (PIM) technologies allows to integrate information from heterogonous systems and publish it quickly and easily in existing E-Commerce platform like Magento, Prestashop, Shopify.

Moreover payment service provider are also mature to handle payments risks and qualify customers at subscription, same for controlling postal addresses and clients information.

It is time to plunge  

Transformation toward this new business model is first a matter of organization, to review how to distribute product information on marketplace and on merchant eStore.
It is also a great opportunity to mutualize logistics, like for example brands in Chocolate, Flowers and Wine which has the same constraints of delivering with controlled temperature.
Finally comes the information system transformation :

  • Integration of products catalog and publish to E-Commerce platform,
  • Integration payment service providers and
  • Integration of data quality providers.

This is no more a complex task to do, this is handle easily by professional consultants.

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